Refund of remitted sales tax cannot be denied after nil assessment absent statutory authority or applicable unjust enrichment provision.

Where an assessment concludes that no tax is due and the turnover falls below the taxable minimum, tax already remitted cannot be retained by the department unless the statute provides a valid basis for retention or recovery. The doctrine of unjust enrichment, drawn from the central excise regime, was held inapplicable where the Tamil Nadu sales tax law contained no corresponding provision for the relevant year, and a later retrospective amendment did not alter that position. The absence of identification of the ultimate beneficiary did not justify withholding restitution where the assessee had not collected tax without authority of law. Refund was therefore recognised, subject to permissible adjustment against current tax dues if applicable.

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Issues: Whether the assessee was entitled to refund of the tax remitted when the assessment determined nil tax and whether the department could retain the amount on the ground of unjust enrichment and non-disclosure of the ultimate beneficiary.

Analysis: The assessment for the relevant year had concluded that the turnover was below the taxable minimum and no tax was due. In that situation, the amount already remitted could not be retained by the department in the absence of a demand or a valid penal proceeding under Section 22(2) of the Tamil Nadu General Sales Tax Act, 1959. The doctrine of unjust enrichment, as embodied in the Central excise regime, was held inapplicable in the absence of a corresponding provision in the Tamil Nadu sales tax law, and the later retrospective amendment could not assist the respondent for the assessment year in question. Since the petitioner had not collected tax without authority of law but had remitted tax in a case ending in nil assessment, the plea that the beneficiary was not identified did not justify retention of the amount.

Conclusion: The assessee was entitled to refund of the tax remitted, and the objection based on unjust enrichment and identification of the ultimate beneficiary was rejected.

Final Conclusion: The impugned refund rejection was set aside and the assessee's right to restitution of the remitted tax was upheld, subject to permissible adjustment against current tax dues if applicable.

Ratio Decidendi: Where an assessment determines that no tax is due, the revenue cannot retain the remitted amount in the absence of statutory authority, and the doctrine of unjust enrichment cannot be invoked to deny refund unless the taxing statute itself contains an applicable corresponding provision.

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